VIX as a hedging tool

Amid a discussion of the decline in open interest in the VIX index, the FT discusses some strategies that have used the index.  These include a range of hedging strategies (including credit) and funds that aim to find an alternative asset class. US ‘fear gauge’ trades hit by steep drop - FT.com:

"David Speth, vice-president of research at the CBOE, acknowledged that open interest figures had dropped in recent weeks.
“There are a number of factors,” Mr Speth said in an interview. “There are a lot of credit players who have used Vix options as a tail hedge, to protect against a drop in credit quality. When credit quality dropped in oil at the end of the year, the hedge didn’t work as well as they liked.”"

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